The Haryana government today exempted solar equipment and parts used in installation of solar power projects from value added tax (VAT).

A decision to this effect was taken by the Haryana Cabinet, which met under the chairmanship of Chief Minister Manohar Lal Khattar, here.

At present, VAT of five per cent plus surcharge is levied on solar devices and equipment in the state, an official spokesman said.

Punjab, Uttar Pradesh, Delhi, Maharashtra and Madhya Pradesh have already exempted solar energy devices from VAT. "Exemption of VAT will enable the trade and industry in Haryana to compete with other states where solar energy devices are exempted from VAT," he said.

This exemption will cost the state exchequer about Rs 2.30 crore, he said.

Various solar devices like solar lantern, water heating system, pumping system, inverter, energy meters, alternators and spare parts such as solar photovoltaic modules, solar collection and dishes would be exempted from levy of VAT.